Template:M summ EUA Annex Allowance Purchase Price

This is the unit price — not the total sum — you have agreed to buy the Allowances for, in the future, at the end of the Transaction. You can therefore straight-line interpolate your carry at any time, and work out whether it is greater than your cost of funding (if it is, yay, you are making a turn!) or less. On the trade date you might expect them to be more or less the same, but for any contango (upward slope) in the Emissions forward curve. The EUA “curve” is often in contango — structurally, because the number of Allowances to be issued in each new year of the Phase 3 Compliance Period of the EU ETS is scheduled to decline, and that is expected to outpace the energy transition efforts in the European corporate and energy sectors.

When you get to Section (d)(i)(1) you may be as disappointed as I was to discover there is no label for what one might have called the “Purchase Amount”; instead you must settle for trotting out its formula (Allowance Purchase Price multiplied by Number of Allowances), or allude gnomically to “Section (d)(i)(1) of the Emissions Annex”, which will hardly help someone not intimately familiar with the definitions. The number of people in the world who are intimately familiar with the Emissions Annex, by the way, would correlate quite closely with they of the ’squad who drafted it. And even some of them are, we rather think, a bit woozy on some of the details.